“When you sell on price you are a commodity.
When you sell on value you are a resource.”
The first thing that comes to our mind when we go and buy a product is what is the price of the good or service? How much does it cost? What value of our money would we get?
Price and Value are always measured on a weighing scale. Some give more emphasis on value and some on price. But have you ever thought of what one pays heed to?? Well, Price of a product is an important factor as it decides your profits and reflects on demand of the product. Price and demand are inversely proportional to each other. The lower the price of the product, the higher will be the demand and vice versa. But, you should not sacrifice the value of the product when you are accumulating wealth.
In the words of Warren Buffet,
“Price is what you pay and Value is what you get”.
This should be one’s motto to achieve long-term success. For example, a customer buys a product of low price, he will be satisfied only for the time being but if he gets a high-quality product the satisfaction will be lasting.
More than ever before, customers chose to buy from a company not just because it offers a product with a fair price, but also because that company has good values and offering a great quality product. Since price often reflects an important part of what someone gives up, a customer’s perceived value of a product will be affected by a marketer’s pricing decision. An easy way to see this is to view value as a calculation:
Value = perceived benefits received / perceived price paid
What are the Reasons that makes you compete on value rather than price??
The answer to your question are below:
Creates Reliability And Trust
Emphasis on Value causes reliability and trust to your brand. The more your customers trust you the more would be their goodwill.
We all know that customers attitude is often drive by the recent experiences or by the perception of others recent experiences, particularly where service or product reliability is at issue. So, the reliability of supply is clearly the essential basic component in building customers confidence.
Makes your Customers Happy and Satisfied
Customers are the basic foundation for business growth. The toughest job selling value to customers is getting them to picture the full depth and breadth of everything your company has to offer.
As they say “A satisfied customer is the best business strategy of all”. Making your customer happy is not a tough job if you are doing your work with honesty and focusing on the value of the product. Because the last thing that will always remain in the mind of the customer is “The product’s value”.
Makes your Targets chose wisely
New companies often make one fatal mistake that forces them to compromise on price. Companies don’t narrow their target market and don’t understand their products likely aren’t for everyone. The business you do and the products you make should be chosen wisely.
For example, if you are selling a Toll-Free number then you cannot target the students.
Target the audience who need it rather than just publicizing anywhere. The more you focus your target market, the more value you can create and offer.
Gains Long Term Goodwill
A valuable product helps in gaining long term success and also results in achieving goodwill of your brand.
Goodwill is difficult to price, but it does make a company more valuable. For example, a company like Coca-Cola, who has been around for decades, makes an avidly popular product based on a secret formula and is perceived positively by the public, would have a lot of goodwill.
The company’s image and goodwill all depend on the value and quality of a product.
Makes Substantial profits you deserve
When you sell a product based on value not just the basic value of your product or service, but the entire experience a customer enjoys. You have added much more in “use value” to their lives than what they paid, while also making the substantial profit you deserve.
Competition on value is a positive experience as it only benefits your customer. Value is always a long term gain and price is short term. So, you decide yourself that you want to focus on price or value.